Gold seems of have stanched the bleeding after Friday’s much higher than expected non-farm payrolls report. Prices are choppy in early trading to start the week, but holding in a tight range of approximately $8. Silver prices are building modestly higher, up around a half-percent.
Spot gold lost $25.00 to close at $1,335.40 an ounce,barely above the daily low. Spot silver was down a big 65 cents to close down 3.23% at $19.66, near the intraday low. Precious metals futures settled lower on Friday as well. December gold contracts settled $23 lower, to $1,344.40 an ounce, down 1.7%. September silver plunged 62 cents an ounce, losing 3.1% to settle at $19.82.
Friday’s big beat on non-farm payrolls isn’t the only thing boosting risk sentiment in markets this morning. China’s trade surplus also surprised to the upside, growing to a 6-month high. Unfortunately, once you get past the headline, exports fell, but imports fell further. Overall, economists weren’t that impressed.
The S&P 500 and Nasdaq both rode the non-farm payrolls higher Friday to close at record highs. The Dow and Nasdaq closed up more than 1% on the day, while the S&P gained nearly 9/10 of a percent. For the week, the Dow recorded a 0.6% gain. The S&P 500 rose 0.4% for the week, and the Nasdaq finished the week 1.1% higher.
The big non-farm payrolls beat was also the wind beneath the wings of the US dollar Friday. The NFP put the possibility of a September interest rate hike by the Fed back on the table, another bullish factor for the greenback. There is no sign of dollar demand diminishing soon, as a dollar liquidity crunch is hitting foreign markets.
Rate hike expectations muted demand for Treasuries, causing yields to rise. The 10-year T note gained 9 basis points to 1.59%. Someone didn’t bother to tell investors in Japan and Europe, as currency-hedged yields on the 10-year US bond is now below zero.
Oil futures are much higher this morning, on news that OPEC members will conduct a behind the scenes meeting next month at the International Energy Forum in Algiers. Crude futures recovered from losses early in the week to post gains, with Brent outperforming WTI on a weekly basis by 1.7% to 0.5%.
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